Fear grips investors yet again!

Tue, 1 Nov Closing

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There was no respite for the indices in the Indian stock markets during the closing hours as well and as a consequence, they shut shop deep in the red. While BSE-Sensex lost in the region of around 225 points, losses on the Nifty came in at close to 70 points. The BSE Mid Cap and BSE Small Cap indices did not suffer as badly but nevertheless closed lower by 0.7% and 0.6% respectively. More than three stocks declined for every one that closed the day on a higher note on the Sensex.

While most other Asian indices also closed in the red, Europe too is in the negative currently. The rupee was trading at Rs 49.3 to the dollar at the time of writing.

Not even a week has passed and the euphoria over the Europe debt deal has turned into widespread pessimism. This, because concerns have emerged over whether Greece will really accept the latest package that it has been offered. And if this were not enough, there are expectations that other countries like Spain and Italy could also default on their debts. The fact that corporate results coming out of our own domestic economy are not exactly the most encouraging is not helping matters either. Thus, the volatility that one was praying to go away seems to have returned with a bang.

Associated Cement Companies (ACC Ltd) announced its consolidated financial results for the third quarter ended September 2011. During 3QCY11, the company has reported 30% YoY and 81% YoY rise in sales and net profits. The apparent jump in sales and profits is on account of a lower base effect during the corresponding quarter of the previous year. Cement sales volume grew by almost 18% YoY to 5.69 m tonnes during the quarter. Operating profits grew by 32% YoY; operating margins improved marginally from 9.4% in 3QCY10 to 9.5% in 3QCY11. Other income grew by 92% during 3QCY11. As a result, net profits surged by 81% YoY; net margins improved from 4.9% in 3QCY10 to 6.9% in 3QCY11. Despite the growth in profits, the stock lost 1% today.

Bajaj Electricals, one of India's leading consumer appliances companies also announced its results today whereby its bottomline growth came in at 7% YoY during the quarter on the back of a 19% growth in topline. While operating margins fell marginally, what impacted profit significantly was the jump in both interest as well as depreciation charges. As far as the half yearly performance is concerned, bottomline suffered a fall of more than 20% on the back of a 16% growth in topline. The stock closed lower by 1% today.